This exit achieves returns for Vantage’s Fund III investors of more than 35 per cent.
Vantage Capital, one of Africa’s largest mezzanine debt fund managers, has fully exited its investment in New GX Capital (New GX), a leading 100 per cent black family-owned investment holding company in South Africa.
“We provided ZAR 250 million of growth capital to New GX which enabled the group to more than double its net asset value over the two-year tenor of our investment. New GX invested in South Africa’s fast-growing fibre and telecoms infrastructure sectors through investee companies Dartcom and DFA. New GX Enviro built a first of its kind ZAR 200 million multi-purpose waste recycling plant in Atteridgeville township in Tshwane providing employment to township residents and boosting the township economy. Our partnership bolstered local manufacturing capacity by constructing a ZAR 100 million fibre manufacturing plant one kilometre from Mamelodi township in Tshwane. New GX invested in a state of the art information technology platform with partners from India that employs over 200 people. We plan to support more talented black industrialists like Khudu Pitje, the founder and CEO of New GX, as we seek to transform the South African economy and uplift the township economy,” said Mokgome Mogoba, Associate Partner at Vantage Capital.
This exit achieves returns for Vantage’s Fund III investors of more than 35 per cent. Vantage provided ZAR 250 million ($20 million) to New GX in 2016 to finance follow-on investments in telecommunications infrastructure, waste management and information technology.
“Our Partnership with Vantage should be considered as a template for addressing the elusive equity gap in the development of black industrialists. Vantage bridged the gap to develop our family business into a much more meaningful industrial group that will play a significant role in creating jobs for the youth of our country. We will in due course announce the next phase of our development,” said Khudu Pitje, CEO and founder of New GX.
Graham McGregor, CFO of New GX added that Vantage encouraged the firm to improve its reporting and risk management capabilities. The Vantage team worked through two challenging cases that New GX faced and never wavered in their support and understanding for our vision of building a leading black owned investment company.
To date Vantage has successfully exited eight investments generating proceeds of ZAR 2.5 billion across its three generations of mezzanine debt funds and achieved an aggregate money multiple of 2.0x.